I never thought it could get to this far, I can remember very when BlackBerry newly came into the market, men it was booming like there was no other smartphone in the market.
Shares of BlackBerry gained more than five percent on the Toronto Stock Exchange following the announcement.
The net loss came to $372 million the US, or 71 cents a share, on revenue of $334 million, as the company booked $147 million in charges from its reorganisation. Second-quarter revenue fell 31.8 percent from a year earlier.
A year ago, it reported a profit of $51 million, or 24 cents a share, on revenue of $490 million.
Excluding one-time items, the company said it broke even. On that basis, analysts had on average expected an adjusted loss of five cents a share on revenue of $393.75 million, according to Thomson Reuters.
But beyond the numbers, the real news was the company announcing plans to stop building its own hardware devices, and instead, focus on making the software that goes into them.
“The company plans to end all internal hardware development and will outsource that function to partners,” BlackBerry said.
That means the company plans to work with other technology manufacturers to build devices that are branded as BlackBerrys and come with all the company’s software and internal workings.
The company announced its first such partnership in a separate release Wednesday, working with one of Indonesia’s largest telecom companies on a joint venture to make smartphones for that market.
“BlackBerry is no longer just about the smartphone, but the smart in the phone,” chief executive John Chen said, adding that the company is currently in late-stage discussions for a similar deal in China and working on several similar initiatives in India.
This is an entirely sensible decision and probably an overdue one,” said IDC technology analyst John Jackson. “Software revenue and the margin profile associated with that is where the focus should have been, and now can be.”
Ross Healy, chair of Strategic Analysis Corporation and a longtime BlackBerry investor, agrees that the move is a savvy one.
I think BlackBerry knows what the are doing and the company has plans.